• 1.FAQS
  • Who controls the Bitcoin network?

    Nobody owns the Bitcoin network much like no one owns the technology behind email. Bitcoin is controlled by all Bitcoin users around the world. While developers are improving the software, they can't force a change in the Bitcoin protocol because all users are free to choose what software and version they use. In order to stay compatible with each other, all users need to use software complying with the same rules. Bitcoin can only work correctly with a complete consensus among all users. Therefore, all users and developers have a strong incentive to protect this consensus.

  • You said Bitcoin works well on the Internet - can you give me an example?

    A great example is the Reddit Change Bot. After you've deposited some bitcoins into your tipping wallet you can then transfer those bitcoins to anyone (even if they've never heard of Bitcoin) just by entering a comment like this:

    $0.5 /u/changetip

    That command will tip $0.5 (in bitcoins) to whoever you are replying to. Variations of that command are also available for Twitter and GitHub.

  • What is the Blockchain?

    Bitcoin is dependent on the blockchain that underlies and structures the system. The blockchain is the vertebrae of the protocol and the glue that holds the network together. It is simply a vast, distributed public ledger of account. It keeps track of every transaction ever made in the network, and all transactions are timestamped and verified by network miners. This is how it works: miners with specialized computers compete to solve mathematical puzzles with other computers, and once they solve a puzzle they are awarded with some Bitcoin, but they also add a “block” of completed transactions to the blockchain for future viewing and verifiability. Once a block is added to the chain the cycle repeats itself, and the computers continue to compete to solve these difficult problems. Every transaction on the blockchain is completely transparent and accounted for in its log. Anyone can see the public keys of any transaction they want (although there are no names associated with transactions). One could go all the way back and view the very first transactions ever made on the first block ever created. This block was unironically called the Genesis Block.

  • How does bitcoin work?

    In order to use the bitcoin system, a user installs a “wallet” on their computer or mobile phone. Once installed the wallet generates a bitcoin address (similar to an email address) that allows the user to send and receive payments. Bitcoins are divisible to 8 decimal places yielding a total of approx. 21×1014 currency units. This allows a person to spend a fraction of a bitcoin. Unlike standard e-commerce and money transfer system, bitcoin transactions are irreversible.